Stonefield Lifestyle Mortgage, a no-payment private mortgage

Who this mortgage is for

This mortgage is for an owner of residential property in Ontario who has a lot of equity and cannot carry a monthly payment for a period.

Often the property is owned outright. Often the money is needed quickly, or a bank has already said no.

Any borrower at a low loan-to-value can apply. Age is not a rule: there is no minimum age and no age test.

The product is offered on liquid residential property, meaning a home in a market where homes sell readily. Rural property, cottages and higher-value homes are looked at file by file under our Stonefield Flex first-mortgage criteria.

It is a first mortgage only. It is available in Ontario only.

How the money comes: day one, each anniversary, and the cap

Day one

You receive the lump sum you need. The first year's interest is advanced at the same time as one tranche, so there is no payment to make in the first year. The lender fee and the third-party legal cost are added to the balance on day one. On request, the first year's interest can be applied monthly instead. We can do either. We prefer the single up-front tranche.

Each anniversary

On each anniversary, a draw equal to the next twelve months' interest is advanced from the registered limit. On a one-year term, the renewal fee is advanced from the limit at the same time. Before each draw, we re-confirm the property's value with our own review. You still make no monthly payment.

The cap

The draws continue until the balance reaches the cap. On liquid residential property, the cap is about 63% of the as-is value. Stonefield Flex lends up to 70% on the same property; the cap sits below that because the interest is added to the balance. The mortgage is registered at the cap from the start.

When the next draw would pass the cap

When the next draw would take the balance past the cap, the file goes to renewal. The choices at that point are monthly payments from then on, a smaller draw, added collateral, or an exit by sale or refinance.

Two term shapes

The first shape is a one-year term, renewed on each anniversary with its renewal fee. The second shape is a multi-year commitment, with the anniversary draws and the fees fixed at the start; it is offered where the opening loan-to-value leaves room. The illustration below shows how many years of draws your opening loan-to-value supports.

How the balance grows, year by year

The balance grows every year, because each year's interest and renewal fee are added to it.

At a flat value, the loan-to-value rises every year. A higher opening loan-to-value rises faster, because the interest and the fee are charged on a larger balance.

The calculator below shows the balance, the loan-to-value and the equity left in each year for your own numbers.

What it costs

Pricing for this mortgage is on our rate sheet. It follows the Stonefield Flex first-mortgage ladder, which is priced by loan-to-value.

The text of this page quotes no rate or fee. The calculator reads today's rate sheet when you use it.

The calculator on this page uses the low end of the band your opening loan-to-value falls in. Your own file is priced on its own facts.

The costs on every file are these:

• Interest on the balance, advanced each year as described above.
• The lender fee, added to the balance on day one.
• A renewal fee at each renewal on a one-year term, added to the balance, or the fees fixed at the start on a multi-year commitment.
• Third-party legal costs, added to the balance on day one.
• Your mortgage broker's fee, if your broker charges one.

You receive a written cost-of-borrowing disclosure before you sign.

• Current private mortgage rates in Ontario (our rate sheet)
• Broker rate sheet

How it ends

Most files end in one of three ways: the property is sold, the mortgage is refinanced, or the estate repays it.

Any other exit that repays the balance is acceptable to us.

You can repay early on the prepayment terms of Stonefield Flex, which your commitment sets out.

If the next draw would pass the cap before an exit, the file goes to renewal with monthly payments, a smaller draw, added collateral, or an exit.

The balance at the exit includes all the interest advanced over the years. The equity left is therefore smaller than at the start, and the calculator shows it for each year.

What we need to review a file

The usual package

Your broker assembles the same first-mortgage package as for any Stonefield file: the property details, the title, any existing mortgage statement, and the property tax status. We also ask what the lump sum is for and how the mortgage is expected to end.

The value basis

We lend on the as-is value from our own underwriting review. We re-confirm the value with our own review before each anniversary draw. If a file needs a formal appraisal, you are told at the start.

Independent legal advice

We ask for independent legal advice on every file. Your own lawyer reviews the mortgage with you before you sign, separately from the lender's lawyer.

A licensed broker

A licensed mortgage broker is part of every file. If you do not have one, we connect you with a Stonefield-approved broker.

What this mortgage is not

It is not a reverse mortgage, which is a separate product with a minimum age and its own lender rules. This is a private first mortgage arranged through an FSRA-licensed brokerage, with a term, a cap and a renewal.

It is not a line of credit. The draws are set amounts on each anniversary, not money drawn at will.

It is not a commitment to lend. Every file is reviewed on its own facts, and a commitment comes only in writing after that review.

It is not advice on whether to borrow. Your broker and your own lawyer are there for that.

Frequently Asked Questions